Director of the FTC's Bureau of Competition rightly called the consent decree a victory for consumers and merchants throughout the country.
Mastercard has entered into a consent order with the Federal Trade Commission following the Commission's investigation into the payment network's refusal to provide token conversion services to competing debit networks for online and in-app eWallet transactions. The Durbin Amendment to the 2010 Dodd-Frank Act sought to inject competition into the debit network market by requiring issuers to enable debit cards for at least two unaffiliated debit networks. Numerous "regional" debit networks compete with Mastercard and Visa for transactions with card-issuing banks, often at a lower cost to the merchant. The quantum of commerce involved is substantial. Debit transactions account for some $4 trillion annually and 80% of Americans carry a debit card.
The Durbin Amendment was intended to give acquirers (parties that accept debit cards) the chance to route transactions over an alternative network that may charge a lower transaction fee than Mastercard or Visa. However, the goals of the law, and the Federal Reserve's Regulation II implementing it, can be frustrated by the complexity of payment networks. For example, the law requires cards to be enabled...
